BELGIUM

Photo by: Nadezhda Bolotina

Kingdom of Belgium

Royaume de Belgique

Koninkrijk België

COUNTRY OVERVIEW

LOCATION AND SIZE.

Belgium is a nation located in Western Europe. It is between the
Netherlands to the north, Germany and Luxembourg to the east, France to
the south, and the North Sea to the west. Belgium is about the size of
Maryland, has an area of 30,510 square kilometers (11,780 square miles)
and includes 280 square kilometers (108 square miles) of inland
waterways. It has 66 kilometers (41 miles) of coastline and its borders
total 1,385 kilometers (861 miles). Belgium shares 620 kilometers (385
miles) with France, 167 kilometers (103 miles) with Germany, 148
kilometers (92 miles) with Luxembourg, and 450 kilometers (280 miles)
with the Netherlands. The nation also claims an exclusive fishing zone
that extends 68 kilometers (42 miles) into the North Sea. Belgium is the
traditional crossroads of Europe and its capital, Brussels, also serves
as the capital of the European Union (EU). Brussels also serves as the
headquarters of the North Atlantic Treaty Organization (NATO) and the
Western European Union (WEU). Brussels is located in the middle of the
country and has a population of 954,460. It is one of the largest cities
in Belgium. In contrast, Antwerp, Belgium's second largest city
has a population of 447,632 and is located in the northern area of the
nation. Lastly, Ghent, Belgium's third largest city has a
population of 224,074 and is in the northwest.

POPULATION.

In July 2000, it was estimated that Belgium had a population of
10,241,506. The population growth rate is estimated at a low 0.18
percent. The fertility rate is estimated at 1.61 children born per woman
and the birth rate consists of 10.91 births per 1,000 people. The death
rate is 10.13 deaths per 1,000.

Like many advanced industrialized countries, Belgium's population
is aging and 16 percent of the inhabitants are over the age of 65, while
only 18 percent are between the ages of 0 and 14. The life expectancy
for men is 74.47 years and 81.3 years for women. A majority of Belgians
now live in urban areas and, as people from both the rural areas and
immigrants settle in the cities, this trend is growing rapidly. The
population density of Belgium is second only to the Netherlands in
Europe.

The nation has 3 major ethnic communities: the Flemish, the Walloons,
and the German-speakers. The Flemish make up about 58 percent of the
population and speak a form of Dutch known as Flemish. The Flemish are
concentrated in the northern regions of the nation. The Walloons speak
French and mainly live in the southern areas of Belgium. About 31
percent of Belgians are Walloons. German-speakers are the third major
group and they mainly reside in the east around the city of Liege.
German-speakers comprise about 1 percent of the population. There are
also numerous other ethnic minority groups in the country. Brussels
alone has 19 different

bilingual communities. Many of these other groups are from North Africa
and the Middle East, particularly Turkey. There is also a significant
Italian population. Since World War II, higher birth rates among the
nation's foreign-born population have increased faster than that
of native Belgians. The majority of new immigrants from the
Mediterranean region tend to settle in the industrial areas of the
Walloons—Brussels and Antwerp. There is a low migration rate of
0.98 per 1,000. Although a small number of recent Belgium immigrants
return to their countries of origin each year, most emigrants go to
nations within the EU or the United States.

Conflicts between the Flemish and the Walloons have traditionally
divided Belgian society. Throughout most of the 19th and early 20th
centuries, the French-speaking population dominated the region. However,
the Flemish eventually gained reform, obtained regional autonomy, and
then established Flanders as a unilingual region. The 1970 constitution
created 3 autonomous political regions: Flanders, Wallonia, and
Brussels. In 1984, the German community of Liege was also granted its
own legislative assembly and began controlling its own educational and
cultural matters. Disputes between the 2 groups continue and have led to
numerous political compromises, including a new constitution in 1993,
which changed Belgium from a unitary state (a country in which the
central government has the most political power) to a federal system (a
country in which the central government and regional governments
collaboratively share power to a certain degree).

STEEL AND PRECIOUS MINERALS.

From the 1800s through the 1960s, steel making was the heart of the
nation's industry. By the end of the 1960s, Belgian steel
manufacturers became less competitive when foreign companies began
producing steel for less by using cheap labor and less expensive
resources. The twin oil crises of the 1970s further undermined the
industry by reducing the worldwide demand for steel. In order to
preserve jobs, the government tried to protect steel manufacturers by
subsidizing the industry.

The high cost of labor continued to impair the competitiveness of these
and other industries. Industry also suffers from excess capacity and
continued high fuel prices. These factors have led car manufacturers
such as Ford and Renault to cut production in Belgium and shift
factories elsewhere. The government has also made considerable attempts
to restructure its remaining industrial base. The main thrusts of these
efforts have been tax incentives for both domestic and foreign companies
in exchange for industry investments. It has also offered incentives for
investments in new technologies and the creation of new manufacturing
methods.

The steel and plastics industries continue to decline. Since 1990,
steel, iron, and coke production has declined by 20 percent.
Nonetheless, about 1,000 companies remain in this industry that employs
52,000 people. Belgium remains the eighteenth largest steel producer in
the world. In 1999, the sector produced 11 million tons of crude steel
and had revenues of 260 billion Belgian francs of which 45 percent came
from exports. This was a 4 percent decline from the previous year. The
primary plastic products include parts for automobile construction and
for engineering projects.

Europe's largest electrolyte copper, zinc, and lead refineries
are located in Belgium. The nonferrous metals industry includes: base
metals such as aluminum, copper, zinc, lead, and tin; precious metals
such as gold, silver, and platinum; and rare or special metals such as
germanium, cobalt, and indium. The metals industry employs some 8,600
people. Its exports were worth 127 billion Belgian francs in 1999. New
industrial investments totaled 2.6 billion Belgian francs in 1999 and
attempted to reduce production costs. The kingdom is also a major
producer of limestone, dolomite, various synthetic materials, and
construction materials such as marble and concrete. There is also a
significant mineral sector that is focused on the refining of imported
minerals such as copper, zinc, and diamonds.

Antwerp is the center of the world's diamond trade. The diamond
industry employs some 30,000 people and represents 6.4 percent of the
nation's exports. In total, 9 out of 10 rough diamonds and 1 out
of 2 cut diamonds pass through Antwerp. The diamond sector represents
one area of industrial growth. The sector experienced an average growth
rate of 6 percent in the 1990s. There are 400 companies engaged in
trading rough-cut diamonds, and 700 companies engaged in trading cut
diamonds. In 1998, the industry's exports were worth 369 billion
Belgian francs.

Glassmaking remains a profitable and expanding industry. It employs some
12,000 people and in 1998, its output was 1.5 million tons of glass.
This generated revenues of 100 billion Belgian francs. The
industry's exports go mainly to other European countries (some 85
percent of glass exports). In Belgium, glass production was 3 times that
of consumption and Belgian workers have among the highest levels of
productivity. In 1980, Belgian glass workers produced 55 kg (lbs) of
glass per hour; by 1999 that output had increased to 109 kg (lbs) per
hour.

CHEMICALS.

Belgium's chemical industry is highly diverse and efficient. From
1985 to 1999, the sector has
grown by an average of 3.5 percent per year. It is the second largest
industrial sector in the nation. The industry is geared for foreign
trade and some 80 percent of its products are exported (75 percent of
these exports went to EU nations). In 1999, chemicals accounted for 23.5
percent of the kingdom's total exports and were worth 1.574
trillion Belgian francs. In an effort to remain competitive, the
chemical industry invested approximately 50 percent of its profits in
research and the development of new products and manufacturing
techniques. In 1999, there were 97,167 people employed by chemical
companies, which represents an 8.4 percent increase since 1985.
Chemicals and pharmaceutical products are now Belgium's top
exports.

TRANSPORT.

Transport equipment is one of the strongest remaining industrial sectors
in Belgium. This sector includes the automotive industry, shipbuilding,
railway and tram construction, bicycles, and the aeronautical and
aerospace industry. Although Belgium does not have its own national
automotive manufacturers, it has a large number of international
companies. Ford, General Motors, Opel, Renault, Volkswagen, and Volvo
have plants in Belgium. In 1999, the nation produced 1.3 million cars.
It also produces specialty vehicles including vans, trucks, buses, and
minibuses. Of the vehicles manufactured in Belgium, 95 percent are
exported. The main markets are France, Germany, and the United Kingdom.
The automotive industry also produces a variety of specialty parts for
cars. The industry specializes in "just in time" (JIT)
manufacturing which involves producing products to be used immediately
upon receipt. This process eliminates the need to stockpile items in
warehouses.

Belgium no longer builds large sea-going vessels, but its shipyards
still build smaller coastal and river craft. In addition, there are a
number of firms that are capable of repairing and refitting larger
ships. Companies also produce a variety of specialty products for marine
use. Belgium invests considerable sums in aerospace. The government
works with other European nations such as France and Germany on projects
such as Airbus jet aircraft and the Ariane rocket.

TEXTILES.

The textile sector employs over 42,500 people in 1,320 textile
factories. Belgium is now the largest carpet exporter in the world.
Textile revenues accounted for 250 billion Belgian francs. Unlike many
of the other traditional industries, Belgium's textile
manufacturers have been able to adjust to changes in the global market.
Belgium is also noted for its quality leather products. There have been
widespread consolidations and advancements in manufacturing techniques.
As a result, the textile sector remains one of Belgium's largest
industrial employers.

ELECTRONICS.

Belgium produces a wide range of electronics equipment that includes
both consumer and business products. This sector of the economy employs
49,000 people in 300 companies. These businesses produced products worth
more than 300 billion Belgian francs. Two-thirds of the kingdom's
electronic products are exported. The majority, 75 percent, goes to
other members of the EU, while the remaining exports are divided among
the United States, Eastern Europe, and Asia. Medical and hospital
electronics are a major part of this sector. The electronics sector is
the largest investor in the economy's infrastructure and research
and development. The sector annually invests some 30 billion Belgian
francs of which 60 percent is in research and development.

FURNITURE.

Furniture manufacturing has a long and distinguished tradition in
Belgium. Adaptability and quality reputation are its keys to continued
success. Increased mechanization and automation have helped contain
costs and kept the industry competitive. It has strong exports to
Germany and the United Kingdom and has recently enjoyed dramatic growth
in the Netherlands. The sector has also aggressively targeted the
markets in Eastern Europe. Belgium furniture exports have increased by
57 percent and have grown by a phenomenal 79 percent to Russia itself.
In 1998, the industry had revenues of 1.89 billion euros that included
1.13 billion euros in exports.

CONSTRUCTION.

The construction industry in Belgium encompasses 2 different broad
areas. The majority of activity is centered on the construction of new
buildings and homes. There is also a considerable market in the
restoration of older dwellings. Brick is the preferred building material
and most homes are custom built. On average, only 10 percent of homes
built are prefabricated. In 1998, residential construction accounted for
46 percent of new contracts, business construction accounted for 41
percent, and 13 percent of new contracts were in civil engineering. In
1997, Belgium's construction companies had revenues of 1 trillion
Belgian francs. Belgian companies also carried out a number of projects
abroad, mainly in developing nations. In 1998, total revenues from these
projects were 88 billion Belgian francs. Government plans to eliminate
slums and provide housing for low-income Belgians have significantly
helped the construction industry grow.

FINANCIAL SERVICES.

The financial sector has 3 main subdivisions: commercial banks, public
credit institutions, and private savings banks. However, the divisions
between these 3 types of institutions became less noticeable in the
1990s. There have been a substantial number of mergers across these
fields. For instance, in 1999 the international banking corporation
Dexia merged its Belgian and French subsidiaries to create a banking
group worth $11 billion. Belgium's Banking Commission supervises
private banks, finance companies, and the oversight of mutual funds.
Investments in the country's financial sector ballooned from $55
billion in 1996 to $300 billion in 1999.

The 3 main trading banks in Belgium are the Fortis Bank, Brussels Bank
Lambert, and KBC. Fortis has a workforce of some 40,000 and 3,000
branches. It services some 7 million customers in Belgium, Luxembourg,
and the Netherlands, and is one of the leading banks in northwestern
Europe. Brussels Bank Lambert has 900 traditional branches and 500
automated teller machines. It is the twelfth largest bank in Europe. KBC
is the nation's third largest bank and is also one of the largest
insurance companies. It has 1,500 bank employees, 500 insurance brokers,
and 8,000 other brokers. This multinational bank has branches in 30
different nations. The fourth and fifth largest banks in Belgium are
foreign-owned. Number-four is Dexier, a joint Belgian-French
multinational, and number-five is Morgan Guaranty Trust of New York (a
subsidiary of J. P. Morgan & Company). Other major international
banks in Belgium are Citibank, Bank of America, and Chase Manhattan
Bank.

In 2000, the EU enacted new rules that allow insurance brokers to
operate in any other EU state as long as they are registered in their
home nation. For instance, Belgian insurance companies will be able to
set up offices in Germany or France without having to be licensed in
that nation. This offers a variety of advantages to Belgian companies.
For instance, 60 to 70 percent of the insurance bought by Belgian
consumers was non-life (including car or home insurance). In contrast,
in other EU states, non-life insurance typically accounts for some 20
percent of the market. Hence, Belgian insurance companies see these new
markets as sources of great opportunities.

TOURISM.

The main centers of the Belgian tourist industry are the
country's coastal region and the Ardennes.

The coastline has 65 resorts and numerous beaches. Most are designed for
family-oriented vacations and draw tourists from France, the United
Kingdom, and the Netherlands. Situated in the southeast of Belgium, the
Ardennes forest is one of the few unspoiled natural areas in Western
Europe. The area attracts campers and daytrippers. It is known for
hiking, fishing, canoeing and kayaking, and mountaineering in the spring
and summer months. In the winter, tourists engage in both downhill and
cross-country skiing.

The total value of tourism in Belgium is $11.425 billion. Of this total,
Belgians traveling within the country spent $4.9 billion. The United
States is the number-one destination for Belgians traveling abroad. In
1999, some 257,000 Belgians visited the United States and spent $652
million.

RETAIL.

Retailers in Belgium have rebounded from a period of stagnation in the
early 1990s. Consumer spending has been increasing at a rate of 2.5
percent over the past few years and is expected to grow in the near
future. Unlike many other markets in the EU or North America,
independent companies still make up a large proportion of the retail
market. For instance, although 78.5 percent of fashion merchandisers are
independent, chain outlets control 16.7 percent of the market. The
remaining 4.8 percent is in the hands of large department stores and
supermarkets.

In 1999, there were 52,807 restaurants in Belgium. The largest chain is
the Quick hamburger restaurant group that has 105 shops. The number-two
chain is the U.S.-owned McDonald's. Other American chains such as
Pizza Hut and Chi Chi's also hold significant market shares.
Sales at foreign-owned restaurants were 10.45 billion Belgian francs
while sales at locally owned stores were 7.53 billion Belgian francs.

CAPITAL:

Brussels.

MONETARY UNIT:

Belgian franc (BEF). One franc is equal to 100 centimes. However, the
centimes denominations are no longer used. The Belgian franc is
exchangeable on an equal basis with the Luxembourg franc. In 1999,
Belgium began using the euro, the common currency of the European Union.
The franc is set at a fixed exchange rate of 40.3399 per euro. The euro
will replace all local currencies within the EU in 2002.